Number of housing units for sale across Ireland at 9-year low

Daft.ie says in its latest report that the total number of properties for sale at any one time across Ireland continues to fall from 2015 and in the first quarter of 2016 was a 9-year low.

At less than 24,000, the report says this is now at its lowest point since February 2007. The biggest falls in availability are now occurring outside Leinster. Across Munster, Connacht and Ulster, there were 13,500 homes for sale in April 2016, compared to almost 21,000 two years previously.

House prices rose by an average of 5.9% in the year to March 2016. The divide between Dublin and the rest of the country persists, with prices effectively stable in the capital — rising just 0.9% in the last year — compared to a rise of 9.7% on average outside Dublin. In almost all parts of the country, however, inflation now is less than three months ago.

The national average asking price in the first quarter of 2016 was €210,000, compared to €198,000 a year ago and €164,000 at its lowest point. In Dublin, prices have risen by an average of €91,000 – or 41% — from their lowest point in mid-2012. Outside the capital, the average increase has been €37,500, or 28%, since the end of 2013.

The report says that while prices are stable in Dublin, they continue to increase strongly in other cities. Compared to the same period in 2015, prices in the first quarter of 2016 were 14.9% higher in Cork, 14% higher in Galway and 18% higher in both Limerick and Waterford cities. Inflation outside the cities varies from 8.3% in Leinster to 10.4% in Connacht-Ulster.

Commenting on the figures, author of the Daft.ie Report Ronan Lyons said: “It is interesting to note that in year-on-year terms,prices are now falling in five Dublin markets — Dublin 2, Dublin 6, Dublin 16, Dublin 18 and South County Dublin.These are some of the most expensive markets in the country and show the effectiveness of the Central Bank rules. Nonetheless, across the country, prices continue to rise, because the increase in population each month is not being matched by an increase in new homes. Addressing the shortage of supply — in particular the high cost base on construction — must a top priority for the new Government.”

The issue in the Irish housing market currently – and in particular in the greater Dublin area – is a lack of homes. Every month, roughly 2,000 new households are formed, each requiring somewhere to live. But each month currently sees the construction of at best 1,000 new homes. In Dublin, the figures are even starker – nearly half of all new households are being formed in or around the capital but only 150 or so properties are being built each month in the city.

The result is that fewer and fewer homes are on the market. And this is a trend that is common to all parts of the country now, not just Dublin, which did not see any significant over-construction during the bubble years. The first graph below shows the total number of properties on the market each month from 2010 on. It is clear from the graph that the tightening of supply in Dublin took place between 2011 and early 2014 and if anything has improved slightly since.